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EIA Upgrades US Gasoline Demand for 2019

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EIA’s US gasoline demand 

The four-week average US gasoline demand increased by 99,000 bpd (barrels per day) or 1.1% to 8,806,000 bpd on January 19–26, 2018. Demand increased by 584,000 bpd or 7.1% year-over-year.

The rise in gasoline demand has a positive impact on gasoline and oil prices. Crude oil and gasoline prices are near a three-year high. The United States Gasoline ETF (UGA) follows gasoline futures. UGA fell 1.6% to 32 on February 6, 2018, which is also near a three-year high.

US gasoline demand peak and low 

US gasoline demand hit 8,222,000 bpd in January 2017, which was the lowest level since February 2012. On the other hand, US gasoline demand hit a record high of 9,776,000 bpd in August 2016.

US gasoline consumption estimates  

US gasoline consumption averaged 9.32 MMbpd (million barrels per day) in 2016 and 9.29 MMbpd in 2017. The EIA released the STEO (Short-Term Energy Outlook) report on February 6, 2018. The EIA estimates that US gasoline consumption could average 9.33 MMbpd in 2018, which is the same as the estimates in January 2018.

The EIA also expects that US gasoline consumption could average 9.4 MMbpd in 2019—0.2% higher than the estimates in January 2018. US gasoline consumption could hit the highest annual average in 2018 and 2019.

The rise in gasoline demand supports gasoline prices. Higher gasoline prices relative to crude oil prices benefit the VanEck Vectors Oil Refiners ETF (CRAK). CRAK has exposure to refining companies. CRAK rose 1.6% to 29.7 on February 6, 2018.

Impact 

Record gasoline demand in 2018 and 2019 could support gasoline and crude oil prices. Higher oil prices benefit funds like the PowerShares DB Oil Fund (DBO) and the United States Oil Fund (USO).

Next, we’ll discuss Iraq’s crude oil production.

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